Kenanga Research expects PIE to record stronger second quarter financial results.
KUALA LUMPUR: Electronics manufacturing services (EMS) vendor PIE Industrial Bhd
(PIE) is set to record strong growth in its financial year 2024 (FY24) as it continues to work on securing more clients.
According to Kenanga Research, the company is in discussions with a potential new customer from China, which is considering the company as its sole contract manufacturer.
The research house added that a deal is premised upon PIE being able to improve its overall margins, apart from being able to boost its revenue growth.
“We believe PIE’s value proposition comes from its strong track record, making it a highly sought-after EMS vendor, more so with China-based businesses stepping up their China+1 initiative to pre-empt any potential punitive US tariffs on their imports,” the research house said.
“We came away from a recent meeting with PIE feeling reassured of its growth prospects,” the research house said.
It expects PIE to record stronger second quarter financial results as the supply shortage from one of its customers would have eased, while its production output is ramped up using additional floor space from one of its plants.
There is also a new server customer which is on track for pilot production in the fourth quarter of FY24, Kenanga Research said.
“We keep our ‘outperform’ call and target price of RM6.75 based on FY25 forecast earnings per share pegged to an unchanged price-earnings ratio of 23.5 times,” Kenanga Research said.
The research house continues to like the company based on its comprehensive skill set, making it a top EMS provider for multinational companies and the various competitive advantages it enjoys as a unit of Foxconn.
The company also has a diversified and evolving client base, the research house added.
